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Field
Trial Title
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Before
The Impact of Non-Events on Trust and Risk-Taking
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After
On the Detrimental Impact of Non-Events on the Efficiency of Risk Communication
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Trial Status
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Before
in_development
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completed
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Abstract
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Before
The reporting of events belongs to the basic tasks in risk communication. People receive information and behavioral recommendations from public institutions when they are confronted with e.g. consumer health risks. But, how does communication work in the event of a non-event? In particular, how needs risk communication to be carried out if the information received diverges from ex-post observations? This work evaluates the results of an experiment investigating the impact of source credibility on human decision-making under risk and uncertainty. Study participants are randomized to groups and are asked to make individual decisions in a repeated lottery. They receive information by an external source regarding the possibility to win/lose if they participated in the lottery. Assuming risk neutral and rational participants, we expect participants to mistrust the source of communication after experiencing several non-events – even though, there is no incentive for the communicator to lie. In our treatments, we vary both, the source of communication and the degree of uncertainty in the communicated information. Any effect deviating from the baseline treatment will then be associated with mistrust in the source of communication. The experimental results may provide support for effective risk communication in an epidemiological or consumer health-related crisis.
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After
Health agencies are responsible for informing the public about (potential) disease outbreaks. If many individuals follow the recommendations of an agency and take preventive measures in case a health risk is identified, the number of actual cases of harm may be low, even if the estimated health risk was high. The literature suggests that individuals who have experienced such a ``non-event'' may question, in hindsight, whether the risk was really as high as communicated and whether (costly) preventive measures were reasonable. Using an online-experiment, we investigate whether the experience of non-events causes participants to perceive a communicating agency as less reliable and to take more risks the next time a risk is communicated, resulting in a less efficient outcome for society. In a repeated task, participants receive information each period about whether their group is in a low- or high-risk scenario from a communication source, and then must decide whether to choose a safe option or invest in a lottery. A non-event occurs if a high-risk scenario was communicated but the actual number of participants who lost the lottery is low. We find that non-events decrease group efficiency in particular if an uninvolved bystander questions the communicated information after a non-event has occurred. Aside from this, communication generally leads to higher efficiency than no communication.
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JEL Code(s)
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Before
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After
I12, D81, D83, C92
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Last Published
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Before
April 14, 2022 12:22 PM
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After
February 02, 2024 05:21 AM
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Additional Keyword(s)
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Before
Non-Events, Uncertainty, Risk Communication, Source Credibility, Decision-making
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After
Non-Events, Uncertainty, Risk Communication, Credibility, Efficiency, Decision-making
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